Govt introduces bill to amend NCDC Act: How it would boost cooperative sector

The government on Monday introduced a bill in Lok Sabha that would allow the National Co-operative Development Corporation (NCDC) to provide loans and grants directly to entities engaged in co-operative development and participate in their share capital.

The NCDC, a statutory organisation under the Ministry of Cooperation, was established in 1963 under the National Co-operative Development Corporation Act, 1962.

Minister of State for Cooperation Murlidhar Mohol introduced the National Cooperative Development Corporation (Amendment) Bill, 2026 to enable the corporation to plan, promote and finance programmes for co-operative development.

Under the proposed amendments, NCDC will be able to provide loans and grants directly to co-operative societies or any entity engaged in co-operative development, provided the funds are used for co-operative societies and the required security is furnished.

The Bill also proposes to allow NCDC, with the approval of the central government, to participate in the share capital of co-operative societies and other entities engaged in co-operative development.

Currently, entities that are not registered as co-operative societies cannot be financed directly by NCDC even if their activities are intended to benefit the co-operative sector.

Such proposals have to be routed through state governments or co-operative societies, leading to procedural delays, according to the Statement of Objects and Reasons accompanying the Bill.

“In view of the expanding requirements of the co-operative sector, it is considered necessary to broaden the mandate of the Corporation from planning and promoting programmes through co-operative societies to plan and promote programmes for co-operative development,” the statement reads.

The proposed legislation defines "co-operative development" as planning, promoting and financing programmes, either directly or through an intermediary entity, for co-operative societies.

It also seeks to expand the definition of foodstuffs to include processed food and other edible products, as well as any other food items that may be notified by the Centre.

The Bill proposes removing the geographical restriction applicable to industrial goods. This will enable assistance for such activities irrespective of their location.

Another proposed provision would empower NCDC to collect from or furnish to the central government, the Reserve Bank, banking companies and other notified financial institutions credit information or other information needed for efficiently discharging its functions.

The Bill also proposes to give NCDC incidental powers necessary for exercising its functions and performing its duties.

The government said the amendments would provide greater flexibility and legal clarity to NCDC, facilitate timely and direct financial assistance for co-operative development and help it respond to the emerging and diversified requirements of the sector.

The Bill states that co-operative societies will continue to remain the primary beneficiaries, while widening the institutional channels through which assistance can reach them.

The National Cooperative Development Corporation Act, 1962 was amended in 1973, 1974 and 2002.